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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB0554
Introduced 1/27/2005, by Rep. William B. Black SYNOPSIS AS INTRODUCED: |
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35 ILCS 5/211 |
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35 ILCS 10/5-20 |
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35 ILCS 10/5-45 |
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Amends the Economic Development for a Growing Economy Tax Credit Act.
Provides that the duration of the credit may not exceed 15 (now, 10) taxable
years. In
provisions setting forth requirements for applicants for the credit, provides
that for
projects determined to be eligible because they meet the investment and new
employee
criteria established by the Department of Commerce and Community Affairs, the
Department shall approve those that will provide a return on the State's
investment. Amends the Illinois Income Tax Act to make the commensurate change
extending the duration of the credit to 15 years. Effective immediately.
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A BILL FOR
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HB0554 |
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LRB094 06729 BDD 36828 b |
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| AN ACT in relation to taxes.
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| Be it enacted by the People of the State of Illinois, |
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| represented in the General Assembly:
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| Section 5. The Illinois Income Tax Act is amended by |
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| changing
Section 211 as follows:
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| (35 ILCS 5/211)
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| Sec. 211. Economic Development for a Growing Economy Tax |
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| Credit. For tax years beginning on or after January 1, 1999, a |
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| Taxpayer
who has entered into an Agreement under the Economic |
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| Development for a Growing
Economy Tax Credit Act is entitled to |
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| a credit against the taxes imposed
under subsections (a) and |
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| (b) of Section 201 of this Act in an amount to be
determined in |
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| the Agreement. If the Taxpayer is a partnership or Subchapter
S |
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| corporation, the credit shall be allowed to the partners or |
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| shareholders in
accordance with the determination of income and |
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| distributive share of income
under Sections 702 and 704 and |
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| subchapter S of the Internal Revenue Code.
The Department, in |
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| cooperation with the Department
of Commerce and Economic |
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| Opportunity
Community Affairs , shall prescribe rules to |
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| enforce and
administer the provisions of this Section. This |
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| Section is
exempt from the provisions of Section 250 of this |
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| Act.
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| The credit shall be subject to the conditions set forth in
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| the Agreement and the following limitations:
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| (1) The tax credit shall not exceed the Incremental |
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| Income Tax
(as defined in Section 5-5 of the Economic |
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| Development for a Growing Economy
Tax Credit Act) with |
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| respect to the project.
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| (2) The amount of the credit allowed during the tax |
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| year plus the sum of
all amounts allowed in prior years |
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| shall not exceed 100% of the aggregate
amount expended by |
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| the Taxpayer during all prior tax years on approved costs
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HB0554 |
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LRB094 06729 BDD 36828 b |
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| defined by Agreement.
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| (3) The amount of the credit shall be determined on an |
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| annual
basis. Except as applied in a carryover year |
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| pursuant to Section 211(4) of
this Act, the credit may not |
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| be applied against any State
income tax liability in more |
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| than 15
10 taxable
years; provided, however, that (i) an |
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| eligible business certified by the
Department of Commerce |
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| and Economic Opportunity
Community Affairs under the |
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| Corporate Headquarters
Relocation Act may not
apply the |
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| credit against any of its State income tax liability in |
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| more than 15
taxable years
and (ii) credits allowed to that |
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| eligible business are subject to the
conditions
and |
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| requirements set forth in Sections 5-35 and 5-45 of the |
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| Economic
Development for a Growing Economy Tax Credit Act.
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| (4) The credit may not exceed the amount of taxes |
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| imposed pursuant to
subsections (a) and (b) of Section 201 |
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| of this Act. Any credit
that is unused in the year the |
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| credit is computed may be carried forward and
applied to |
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| the tax liability of the 5 taxable years following the |
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| excess credit
year. The credit shall be applied to the |
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| earliest year for which there is a
tax liability. If there |
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| are credits from more than one tax year that are
available |
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| to offset a liability, the earlier credit shall be applied |
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| first.
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| (5) No credit shall be allowed with respect to any |
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| Agreement for any
taxable year ending after the |
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| Noncompliance Date. Upon receiving notification
by the |
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| Department of Commerce and Economic Opportunity
Community |
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| Affairs of the noncompliance of a
Taxpayer with an |
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| Agreement, the Department shall notify the Taxpayer that no
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| credit is allowed with respect to that Agreement for any |
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| taxable year ending
after the Noncompliance Date, as stated |
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| in such notification. If any credit
has been allowed with |
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| respect to an Agreement for a taxable year ending after
the |
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| Noncompliance Date for that Agreement, any refund paid to |
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| the
Taxpayer for that taxable year shall, to the extent of |
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HB0554 |
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LRB094 06729 BDD 36828 b |
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| that credit allowed, be
an erroneous refund within the |
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| meaning of Section 912 of this Act.
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| (6) For purposes of this Section, the terms |
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| "Agreement", "Incremental
Income Tax", and "Noncompliance |
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| Date" have the same meaning as when used
in the Economic |
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| Development for a Growing Economy Tax Credit Act.
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| (Source: P.A. 91-476, eff. 8-11-99; 92-207, eff. 8-1-01; |
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| revised 12-6-03.)
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| Section 10. The Economic Development for a Growing Economy |
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| Tax Credit Act is
amended by changing Sections 5-20 and 5-45 as |
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| follows:
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| (35 ILCS 10/5-20)
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| Sec. 5-20. Application for a project to create and retain |
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| new jobs.
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| (a) Any Taxpayer proposing a project located or planned to |
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| be located in
Illinois may request consideration
for |
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| designation of its project, by formal written letter of request |
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| or by
formal application to the Department,
in which the |
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| Applicant states its intent to make at least a specified level |
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| of
investment and
intends to hire or retain a
specified number |
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| of full-time employees at a designated location in Illinois.
As
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| circumstances require, the
Department may require a formal |
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| application from an Applicant and a formal
letter of request |
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| for
assistance.
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| (b) In order to qualify for Credits under this Act, an |
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| Applicant's project
must:
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| (1) involve an investment of at least $5,000,000 in |
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| capital improvements
to be placed in service and to employ |
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| at least 25 New Employees within the
State as a direct |
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| result of the project;
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| (2) involve an investment of at least an amount (to be |
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| expressly specified
by the Department and the Committee) in |
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| capital improvements to be placed in
service and will |
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| employ at least an amount (to be expressly specified by the
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HB0554 |
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LRB094 06729 BDD 36828 b |
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| Department and the Committee) of New Employees
within the |
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| State, provided that the Department and the Committee have
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| determined that the project will provide a substantial |
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| economic benefit to the
State; or |
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| (3) if the applicant has 100 or fewer employees, |
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| involve an investment of at least $1,000,000 in capital |
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| improvements to be placed in service and to employ at least |
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| 5 New Employees within the State and that the State will |
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| receive a return on its investment as a direct result of |
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| the project.
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| (c) After receipt of an application, the Department may |
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| enter into an
Agreement with the Applicant if the
application |
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| is accepted in accordance with Section 5-25.
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| (Source: P.A. 93-882, eff. 1-1-05.)
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| (35 ILCS 10/5-45)
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| Sec. 5-45. Amount and duration of the credit.
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| (a) The Department shall
determine the amount and
duration |
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| of the credit awarded under this Act. The duration of the
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| credit may not exceed 15
10 taxable years.
The credit may be |
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| stated as
a percentage of the Incremental Income Tax |
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| attributable
to the applicant's project and may include a fixed |
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| dollar limitation.
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| (b) Notwithstanding subsection (a),
and except as the |
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| credit may be applied in a carryover year pursuant to Section
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| 211(4) of the Illinois Income Tax Act, the credit may be |
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| applied against the
State income tax liability in more than 10 |
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| taxable years but not in more than
15 taxable years for an |
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| eligible business
that (i) qualifies under this Act
and the |
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| Corporate Headquarters Relocation Act and has in fact |
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| undertaken a
qualifying project within the time frame specified |
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| by the Department of
Commerce and Economic Opportunity
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| Community Affairs under that Act, and (ii) applies against its
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| State income tax liability, during the entire 15-year
period, |
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| no more than 60% of the maximum
credit per year that would |
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| otherwise be available under this Act.
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